Broadcom makes unsolicited bid for Emulex

Broadcom says it is making its $764m proposal public because Emulex refused to continue negotiations that broke off in December

Broadcom on Tuesday made an unsolicited offer to buy Emulex for $764m, or $9.25 a share, in a bid that represents a 40 percent premium over Emulex's closing price of $6.61 on Monday.

Broadcom disclosed its offer after sending a letter to Emulex's board of directors. The company said it was making its proposal public because Emulex refused to continue negotiations that broke off in December.

Broadcom produces semiconductors used in an array of communications products, including wireless phones, cable set-top boxes and wired communications networks. Thirty-year-old Emulex makes technology used in computer datacentres.

Emulex later adopted a 'poison pill' plan to thwart a potential takeover, saying in January it was not for sale, Broadcom said. The bid was first revealed in a preliminary report by The Wall Street Journal on Tuesday morning.

In a separate release, Broadcom reported a first-quarter loss of $91.9m (£62.7m), or 19 cents a share, compared with net income of $74.3m, or 14 cents a share, in the same quarter a year earlier. Revenue dropped 24.2 per cent to $853.4m.

Yet the maker of semiconductors for wireless phones and other communications equipment said orders improved near the end of the quarter, signalling a sequential increase in revenue in the current second quarter.